By: Matthew Dixon, Brent Adamson
30 MINUTE AUDIO / 3,700 WORDS (12 PAGES)
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How do you make your voice heard in a world of complex deals and risk-averse customers? How can you maintain control to ultimately win customer loyalty and drive sales growth?
Contrary to traditional wisdom that places emphasis on nurturing relationships, Adamson and Dixon reveal the winning skills and behaviors behind the Challenger Sale.
Read this book to unlock the clear-cut strategies that build Challenger behaviors across the entire sales force and make them a part of your organizational DNA.
TOP 20 INSIGHTS
Solution Selling is the shift from transactional sales of single products to creating bundled-offerings based on consulting. This model was driven by suppliers seeking to escape the pressure of being commodified by making it harder for competitors to replicate their offerings.
Solution Selling has led to increased complexity and risk for the customers who increasingly seek consensus-based sales, demand customization, hire third-party consultants and shift a part of the risk to the supplier. This has made selling much more challenging than before.
Top performers are incredibly valuable in Solutions Selling. In transactional-selling, the performance gap between average and star performers is 59%. In solutions selling, the gap widens dramatically to nearly 200%. The value in narrowing the performance gap halfway from good to great results in a 100% performance jump.
Rep fall into five distinctive profiles - the Hard Worker, the Relationship Builder, the Lone Wolf, the Reactive Problem Solver, and the Challenger. In complex sale scenarios, the dominance of Challengers is 50% of star performers while the share of Relationship Builders drops to nearly zero. This makes Challengers crucial to the success of a sales force.
Challengers are defined by their ability to use constructive tension to do three things - teach customers to compete more effectively, tailor for resonance for every stakeholder, and taking control of the overall sale process.
A CEB survey of 5000 individuals at client customer organizations showed that brand, product, and service accounted for only 38% of customer loyalty. Better value for money accounted for a mere 9%. A massive 53% depended on the overall sales experience. Customers place the greatest value on actionable insights given by suppliers that help them save or make money differently.
The key to effective teaching is to identify the supplier’s unique value proposition. A CEB survey of B2B customers showed that only 35% of companies are able to establish themselves as preferred over their competitors. Only 14% of the apparently unique benefits offered by the company were perceived to be unique by customers.
The heart of the Commercial Teaching pitch is the answer to the question “What’s currently costing our customers more money than they realize, that only we can help fix?” Identifying the supplier’s unique capabilities lies at the core of the Challenger model.
In Commercial Teaching, the supplier organization supports Challenger reps by prescoping customer requirements by relying on market segmentation and customer analysis. The conversation outline is prescripted from the hypotheses to the solution. The actual solution to be proposed is predefined, by creating a set of solutions that are tailored to common needs of customers.
CEB’s research shows that the top concern for decision makers was consensus across their organization on the sale. Closing a deal requires nurturing stakeholders across the organization. Challenger reps cultivate loyalty across the organization by tailoring the teaching to individual stakeholders based on their value drivers and economic drivers.
Taking control of the sale boils down to two things: the ability to maintain momentum across the sales process and comfort with discussing money. Challengers take control from the beginning of the sale by teaching the customer the process of buying a complex solution and coaching the customer on who needs to be involved.
Reps tend to avoid taking control in a sale because of a perceived imbalance of power between the rep and customer. Study shows, however, that 75% reps believe procurement has more power, while 75% procurement officers believe reps have more power.
While sales managers are supposed to be crucial in successfully implemented the Challenger model, 63% of reports responded that their managers don't have the skills needed to adapt to the evolving sales model.
Three high-level factors mattered most in managerial excellence: Selling Skills (25%), Coaching (28%) and Sales Innovation (29%), the single biggest contributor to manager performance.
While coaching is improving performance on known behaviors, innovation is the ability to drive performance in unforeseen contexts. Data shows that coaching and sales innovation skills usually occur independently of each other in managers.
Coaching does not have a significant impact on both the weakest and strongest performers. However, good coaching can boost the performance of the median by almost 19%. It makes sense to focus coaching efforts away from the low and star performers towards the core group.
Sales innovation is driven by three key activities: 1) Investigate what prevents a deal from advancing, 2) Create innovative mapping solutions of suppliers’ capabilities to meet customers challenges, and 3) Share innovation efforts to enable replication.
The world of sales has shifted from coaching for a known, predictable sales world to innovating for the unknown in a world of solution selling. Most supplier organizations are still designed for efficiency in a world where effectiveness is in fact far more valuable.
As opposed to Narrowing Thinking, Opening Thinking focuses on generating as many options as possible. A key requirement for deal innovation is helping managers overcome their inclination for Narrowing Thinking and embrace Opening Thinking.
Most companies aim for 80% adoption, rather than the complete adoption, of the Challenger model. This is actually enough to shift organizational behavior and the final 20% is just a matter of time.
In 2009, when business-to-business sales leaders were facing the harshest sales environment in decades, some sales reps were closing near-impossible deals. To understand what was happening, CEB Inc launched an extensive study surveying sales managers from 90 companies and over 6000 sales reps across geographies and industries. The research insights that emerged on what sets the best-performing sales reps apart were completely counterintuitive, shattering existing industry wisdom. This book documents the key insights and strategies necessary to succeed in today's complex sales environment.
A BRAVE NEW WORLD OF SOLUTION SELLING
Solution Selling is the shift from single product transactions to creating bundled-offerings based on consulting. This was driven by suppliers seeking to escape being commoditized by making it harder for competitors to replicate their offerings. However, to reduce complexity and risk, customers increasingly seek consensus across the team, shift risk to suppliers, demand greater customizations and hire consultants to navigate complex deals.
This means three things for Suppliers:
Top performers are incredibly valuable in Solutions Selling. In a transactional-selling environment, the performance gap between average and star performers is 59%. In solutions selling, the gap widens dramatically to almost 200%.
There is huge value in narrowing the performance gap between the core and the top performers. Getting someone halfway from good to great results in a 100% performance improvement.
If the core is left unattended, they will fall behind to a point where they can't execute solutions sales at all.
FIVE DISTINCTIVE SALES PERSONAS
The results from the CES study showed that certain rep characteristics tend to occur together in five distinctive groups. These describe the five most common sales rep profiles found in the real world.
The Hard Worker: These are self-motivated sales reps who consistently put in effort, care about process and believe that making enough calls and visits will translate into good conversions.
The Relationship Builder: The Relationship Builders primarily focus on being readily available to customers and providing top-notch service to build strong relationships across the organization.
The Lone Wolf: These self-confident reps rely primarily on their gut feel instead of rules. They have little compliance to organizational processes but excel in meeting targets.
The Reactive Problem Solver: These are detail-oriented individuals who focus on ensuring that every promise is delivered. This focus on customer delight can come at the cost of new business.
The Challenger: Challengers have a deep understanding of their customer’s business and are assertive in sharing their views and teaching customers to compete better. They also challenge leaders in their organization with new insights, making them to think differently about complex issues.
CEB’s research showed that while core performers were evenly distributed, challengers dominated among star performers accounting for nearly 40%. In complex sales, challengers account for nearly 50% of star performers. In the world of Solution Selling, which demands that reps execute complex sales, Challengers is crucial to the success of a sales force.
Challengers are defined by their ability to use constructive tension to do three things - teach customers to compete more effectively, tailor for resonance for every stakeholder and take control of the overall sale process. With the right tools, coaching, and incentives, most reps can be trained to act more like Challengers. However, creating Challengers is as much about organizational capability as it is about equipping reps to behave differently.
SKILL 1: TEACH FOR DIFFERENTIATION
A CEB survey of 5000 client stakeholders shows that a massive 53% of customer loyalty depends on the sales experience. Customers place the greatest value on actionable insights given by suppliers that help them identify new ways to penetrate markets, reduce risks and increase revenue. Challengers fit perfectly as they understand customer challenges better than customers themselves and teach them new approaches to key business needs.
Four Rules of Commercial Teaching:
Commercial Teaching is teaching customers something valuable about their business in a way that reliably leads to wins for the supplier organization. There are four rules to commercial teaching:
Lead to Your Unique Strengths: Commercial teaching must ultimately connect back to a unique supplier capability that differentiates them from competition to translate into sales.
Challenge Customer Assumptions: Challengers must know their part of the customer business well to fundamentally “reframe” the way customers think about their business.
Catalyze Action: A good teaching conversation builds a compelling commercial argument for why taking action matters.
Scale Across Customers: For teaching to be effective, organizations must provide reps with well-scripted insights and diagnostic questions to map insights to customers.
Six Steps to World-class Commercial Teaching
Commercial teaching relies strongly on building a powerful narrative using both the rational and emotional dimensions to nudge customers into making decisions.
Step 1 - The Warmer: The objective is to build credibility by showing that you understand the customer’s world through well-researched speculations of the customer’s challenges.
Step 2 - The Reframe: It’s an insight designed to give a new perspective to the challenges discussed and makes the customer see it as a growth opportunity.
Step 3 - Rational Drowning: The true magnitude of the challenge is brought out through data, charts and graphs to convince the customer why it’s important to solving this challenge.
Step 4 - Emotional Impact: Creates a personal connection with the narrative by narrating cases of costs similar companies paid by indulging in behavior similar to the customer’s organization.
Step 5 - A New Way: This is the time to detail the solution point-by-point and draw a picture of the improvements that can happen if the customer behaves differently. This focus is still the solution not the supplier.
Step 6 - Your Solution: This is the step where the rep connects the solution outlined to the supplier’s unique capabilities, making the teaching commercial.
Create Your Organization’s Teaching Script
The heart of the Commercial Teaching pitch is “What’s currently…